Is this common practice when selling a house?

SurplusToys · 05-04-2021 11:23am #1

So I’m towards the end of the process of buying my first home.
In the end we settled for 240k.

The sellers solicitor is now asking that the price on the transfer deed be reduced to 225k.

This figure of 225k according to the solicitor 240k minus 15k for furniture.

Is this normal practice?

Would appreciate hearing some opinions.

Allinall · 05-04-2021 11:27am

SurplusToys wrote: »

So I’m towards the end of the process of buying my first home.
My first bid was 225k which was rejected.
In the end we settled for 240k.

The sellers solicitor is now asking that the price on the transfer deed be reduced to 225k.

This figure of 225k according to the solicitor and estate agent is 240k minus 15k for furniture.

I never ever agreed to buy any furniture and this is the 1st time I’ve ever heard of 15k number. If I was told furniture cost 15k I would of asked for it to be removed.

Is this normal practice or have I been scammed?

I’ve already transferred my 10% of the mortgage needed to my solicitor but my solicitor is holding off on requesting funds from my bank until this is sorted out.

Would appreciate hearing some opinions.

What does your solicitor say?

It sounds like the seller is looking to reduce the sale price for some reason- possibly tax evasion.

Personally I would be reluctant to enter into such an arrangement.

Is there any “furniture “ included in the sale?

05-04-2021 11:28am

Sounds totally illegal. Can you pull out now?

Samuel T. Cogley · 05-04-2021 11:31am

I'd be putting a complaint into the PSRA, but I'm not sure that would help you much. Sellers may pull out if you don't play ball.

headtheball14 · 05-04-2021 11:31am

This will reduce the tax they pay, also if they are dealing with a bank as in repossession this means that they can pay the bank 225 and pocket the rest. Ask them to detail the furniture and the price for each piece.
It's basically fraudulent but not unheard of. Personally I wouldn't be keen.

Mundo7976 · 05-04-2021 11:31am

Sounds like a bit of cash in hand for the seller, will usually say its for the purchase of furniture or a shed or something. You'll still be paying 240k if the furniture point is removed, they'll just have to pay the fees on the extra 15k. They may even pull out of the deal and find someone who's willing to pay part cash.

Xander10 · 05-04-2021 11:32am

Seems high value on furniture. Tell them you don't want the furniture and ask to agree to pay €15k less

SurplusToys · 05-04-2021 11:34am

I need to speak to my solicitor next week but he has concerns that changing the price on the title deeds might affect my loan offer from the bank.

There is furniture in the house and we told that it would be left there.
No mention of 15k was ever mentioned.
Honestly one of the 1st things we were going to do when we moved in was to get the furniture collected and donate it somewhere.

I'm not sure if it's too late to pull out.
I do like the house but this (what seems like intentional deceit) has made me pretty angry to the point where I want to tell them to eff off

headtheball14 · 05-04-2021 11:35am

They are chancing their arm to be honest, depends if you think it will go for more ,were there any bidders before? You could go back with a lower offer .

headtheball14 · 05-04-2021 11:36am

If you haven't transferred the 10 percent or signed the contract you can pull out. You may have to pay solicitor fees but many will waive or reduce this if you go ahead with your final purchase

Mad_maxx · 05-04-2021 11:38am

SurplusToys wrote: »

So I’m towards the end of the process of buying my first home.
My first bid was 225k which was rejected.
In the end we settled for 240k.

The sellers solicitor is now asking that the price on the transfer deed be reduced to 225k.

This figure of 225k according to the solicitor and estate agent is 240k minus 15k for furniture.

I never ever agreed to buy any furniture and this is the 1st time I’ve ever heard of 15k number. If I was told furniture cost 15k I would of asked for it to be removed.

Is this normal practice or have I been scammed?

I’ve already transferred my 10% of the mortgage needed to my solicitor but my solicitor is holding off on requesting funds from my bank until this is sorted out.

Would appreciate hearing some opinions.

my mother bought a house for 365k recently but the price for stamp duty was 362k

i dont see why you have a problem here ?, its a fairly common ( off the record ) approach, you are saving on stamp duty by over valuing the contents , what the vendor is saving should not concern you

SurplusToys · 05-04-2021 11:38am

I've transferred 10% to my solicitor.
As far as I'm aware my solicitor hasn't paid this to the seller yet.
Am I stuck?

SurplusToys · 05-04-2021 11:39am

I was the only person who put an offer on the house. It had been on the market for about 6 months.

Mad_maxx · 05-04-2021 11:39am

Xander10 wrote: »

Seems high value on furniture. Tell them you don't want the furniture and ask to agree to pay €15k less

good luck with that in the current climate :rolleyes:

SurplusToys · 05-04-2021 11:40am

My solicitor told me the stamp duty would not be affected. The only thing that would be affected would be capital gains tax if I ever wanted to sell

Mad_maxx · 05-04-2021 11:41am

mountain out of a molehill

Mad_maxx · 05-04-2021 11:42am

SurplusToys wrote: »

My solicitor told me the stamp duty would not be affected. The only thing that would be affected would be capital gains tax if I ever wanted to sell

a house costing 225 K has a lower stamp duty bill than one at 240k , you are saving 150 euro

huskerdu · 05-04-2021 11:43am

SurplusToys wrote: »

I've transferred 10% to my solicitor.
As far as I'm aware my solicitor hasn't paid this to the seller yet.
Am I stuck?

If you have signed the contract , you can’t pull out , but in this case, you should ask your solicitor.

This sounds like an attempt to get you to collude on tax evasion. It was the sellers solicitor who suggested this . Why did you ask if the estate agent scammed you ? What did the estate agent do ?

05-04-2021 11:43am

I’m struggling to see how the EA scammed you, isn’t it the sellers solicitor who is requesting the new designation?

Does this change the price you agreed to pay?

Taxburden carrier · 05-04-2021 11:44am

SurplusToys wrote: »

My solicitor told me the stamp duty would not be affected. The only thing that would be affected would be capital gains tax if I ever wanted to sell

CGT on your primary residence?

05-04-2021 11:46am

Taxburden carrier wrote: »

CGT on your primary residence?

If seller lives there, not sure how the tax evasion angle would apply.

SurplusToys · 05-04-2021 11:46am

huskerdu wrote: »

If you have signed the contract , you can’t pull out , but in this case, you should ask your solicitor.

This sounds like an attempt to get you to collude on tax evasion. It was the sellers solicitor who suggested this . Why did you ask if the estate agent scammed you ? What did the estate agent do ?

The estate agent sent a letter to the seller last month stating that

"The sale has been agreed at 240k with 15k towards contents."

Friday was the 1st time I saw this letter when my solicitor forwarded it to me.

SurplusToys · 05-04-2021 11:47am

Mad_maxx wrote: »

mountain out of a molehill

I really do hope its a mountain out of a molehill.

Could you elaborate on why you believe this please?

Vestiapx · 05-04-2021 11:47am

This is a case of the seller wanting to benefit at your expense or at least at no gain to you. Look for the compromise position where both you and the other party stand to gain and if they don't want to deal then either walk away or suck it up.

jhegarty · 05-04-2021 11:48am

SurplusToys wrote: »

I've transferred 10% to my solicitor.
As far as I'm aware my solicitor hasn't paid this to the seller yet.
Am I stuck?

No , you can still back out at this stage with no loss (apart from your solicitor's bill).

SurplusToys wrote: »

I was the only person who put an offer on the house. It had been on the market for about 6 months.

You can also lower your offer at this stage.

SurplusToys · 05-04-2021 11:48am

Taxburden carrier wrote: »

CGT on your primary residence?

I dont really understand all of this but specifically he said CGT would be affected if I used the house as an investment property

Mad_maxx · 05-04-2021 11:49am

SurplusToys wrote: »

The estate agent sent a letter to the seller last month stating that

"The sale has been agreed at 240k with 15k towards contents."

Friday was the 1st time I saw this letter when my solicitor forwarded it to me.

you are not being scammed , the house costs 240 k regardless of whether you are getting contents or no more than the bulb holders in the ceiling , if you have a moral objection to the whole thing , thats fine but thats all this is here , you are not being conned out of extra money

ahnowbrowncow · 05-04-2021 11:49am

Taxburden carrier wrote: »

CGT on your primary residence?

What if it's not his primary residence when they want to sell?

He will have to pay an extra €5k in CGT just for the benefit of this vendor.

SurplusToys · 05-04-2021 11:50am

Dav010 wrote: »

If seller lives there, not sure how the tax evasion angle would apply.

The seller owned the house just to rent it out. They weren't living there

Mimon · 05-04-2021 11:52am

I know someone who went ahead in a similar situation. Was 10 grand for the contents. She presumed at the time that it was a vulture fund/bank selling it and it was a way for the previous owner to get some money out of the sale.

As far as I'm aware her offer price was not bumped up by 10 grand. She just payed what she offered and 10 grand less went towards the house and went into the previous owners account. She had cash for 50% or so of the house so it was doable.

She's had no consequences from this, if that's any good to you OP. Maybe talk to your solictor?

spodoinkle · 05-04-2021 11:53am

Mad_maxx wrote: »

you are not being scammed , the house costs 240 k regardless of whether you are getting contents or no more than the bulb holders in the ceiling , if you have a moral objection to the whole thing , thats fine but thats all this is here , you are not being conned out of extra money

If I bid 240 for a house and won, to be told when deposit paid "well actually you have paid 225 for the house and 15 for the contents you knew nothing about" how is it not a con

Samuel T. Cogley · 05-04-2021 11:55am

Actually on reflection I'd tell them you'd reduce it to 225K on condition you pay 10K for furniture.

ahnowbrowncow · 05-04-2021 11:56am

SurplusToys wrote: »

The seller owned the house just to rent it out. They weren't living there

It's tax evasion, I wouldn't be entertaining it and hopefully you're solicitor says the same.

There are only downsides to this for you. Will it affect your loan to value ratio of your mortgage and mortgage interest? Possible extra CGT in the future when you want to sell

embraer170 · 05-04-2021 11:57am

SurplusToys wrote: »

The estate agent sent a letter to the seller last month stating that

"The sale has been agreed at 240k with 15k towards contents."

Friday was the 1st time I saw this letter when my solicitor forwarded it to me.

Your solicitor has failed by not informing you of this earlier.

While the CGT aspect may not impact you under current rules (assuming it is your primary residence), things can change. By lowering the value of the house in the transaction, you could face a higher tax bill in the future.

15k also seems like a huge amount for old furniture.

embraer170 · 05-04-2021 11:58am

Samuel T. Cogley wrote: »

Actually on reflection I'd tell them you'd reduce it to 225K on condition you pay 10K for furniture.

That actually seems like a good approach.

05-04-2021 11:58am

huskerdu wrote: »

If you have signed the contract , you can’t pull out , but in this case, you should ask your solicitor.

They can pull out until the seller has signed the contract. If the 10% has not been transferred, the seller hasn’t signed the contracts.

SurplusToys · 05-04-2021 12:02pm

embraer170 wrote: »

Your solicitor has failed by not informing you of this earlier.

While the CGT aspect may not impact you under current rules (assuming it is your primary residence), things can change. By lowering the value of the house in the transaction, you could face a higher tax bill in the future.

15k also seems like a huge amount for old furniture.

15k is a huge amount.

Most of the furniture looks to be 2nd hand. The only things I saw of real value where the kitchen appliances.

Mad_maxx · 05-04-2021 12:02pm

spodoinkle wrote: »

If I bid 240 for a house and won, to be told when deposit paid "well actually you have paid 225 for the house and 15 for the contents you knew nothing about" how is it not a con

the purpose of placing a value on the contents is often to reduce stamp duty costs for the buyer and other taxes for the vendor , it happens all of the time

if the OP believe he is being conned , ask the vendor ( if its not too late ) to consider keeping the contents and to renegotiate for sale without contents , i doubt the price changes

Car99 · 05-04-2021 12:02pm

If you're put out by this and believe the house could be purchased for less You could play hardball and say I dont want the furniture my offer is now 225k .

ahnowbrowncow · 05-04-2021 12:04pm

embraer170 wrote: »

That actually seems like a good approach.

It's not really, they're not likely to entertain it as it wipes out their CGT evasion gain.

Even if they meet halfway it's a small gain to be involved in tax evasion and that gain will be much less than the extra CGT on the house if sold in the future if not the PPR.

05-04-2021 12:08pm

SurplusToys wrote: »

15k is a huge amount.

Most of the furniture looks to be 2nd hand. The only things I saw of real value where the kitchen appliances.

It’s important you understand, the value assigned to the furniture is nominal for the purposes of the sale contract, they are not telling you the furniture is worth €15k.

Again op, how is the EA scamming you?

ahnowbrowncow · 05-04-2021 12:11pm

Dav010 wrote: »

It’s important you understand, the value assigned to the furniture is nominal for the purposes of the sale contract, they are not telling you the furniture is worth €15k.

Again op, how is the EA scamming you?

By leaving the OP to foot a future CGT bill so they can reduce their current one. How is that not a scam?

Valhallapt · 05-04-2021 12:11pm

This is not a con, or a scam its not tax evasion and at 15k you couldn’t even term it aggressive tax avoidance. It is a legitimate and very common practice to avoid unnecessary tax, everyone has to pay tax but they also have a right to ensure they pay no more than is necessary. A house and it’s contents are taxable at different rates, nothing wrong whatsoever to pay for them separately. In practice you agree a value for all in price on a house and then the contracts may be a little different. I am surprised at all the negativity on here about it, my understanding was that it was normal on all secondhand properties.

drunkmonkey · 05-04-2021 12:14pm

Have you some cash your not putting into the mortgage, it might be worth having a word with the seller as if it's all going to the bank you may be able to reduce the purchase price considerably.

ahnowbrowncow · 05-04-2021 12:16pm

Valhallapt wrote: »

This is not a con, or a scam its not tax evasion and at 15k you couldn’t even term it aggressive tax avoidance. It is a legitimate and very common practice to avoid unnecessary tax, everyone has to pay tax but they also have a right to ensure they pay no more than is necessary. A house and it’s contents are taxable at different rates, nothing wrong whatsoever to pay for them separately. In practice you agree a value for all in price on a house and then the contracts may be a little different. I am surprised at all the negativity on here about it, my understanding was that it was normal on all secondhand properties.

Lol, "unnecassary tax". It's tax evasion, pure and simple, they're reducing their CGT.

There are no benefits for the OP to do this, in fact it will possibly leave the OP with a larger CGT bill in the future.

Darc19 · 05-04-2021 12:18pm

[Deleted User] wrote: »

Sounds totally illegal. Can you pull out now?

How is it illegal?

I'd love if people who blurt out rubbish like this could give a reason for their statement..

05-04-2021 12:18pm

ahnowbrowncow wrote: »

By leaving the OP to foot a future CGT bill so they can reduce their current one. How is that not a scam?

I’m wondering how an EA can decide what is in the sale contract. Perhaps you can explain how the EA is scamming the op.

SurplusToys wrote: »

The sellers solicitor is now asking that the price on the transfer deed be reduced to 225k

h2005 · 05-04-2021 12:18pm

If the asking price is 240k and that is what the OP is paying why does it matter how it’s broken out? I would have assumed something like this is very common if you’re selling with contents in place.

Valhallapt · 05-04-2021 12:20pm

ahnowbrowncow wrote: »

Lol, "unnecassary tax". It's tax evasion, pure and simple, they're reducing their CGT.

There are no benefits for the OP to do this, in fact it will possibly leave the OP with a larger CGT bill in the future.

How is it evasion? That’s a big claim.

SurplusToys · 05-04-2021 12:20pm

h2005 wrote: »

If the asking price is 240k and that is what the OP is paying why does it matter how it’s broken out? I would have assumed something like this is very common if you’re selling with contents in place.

It's my 1st time buying so I've no idea if its common practice or not.

Mad_maxx · 05-04-2021 12:21pm

h2005 wrote: »

If the asking price is 240k and that is what the OP is paying why does it matter how it’s broken out? I would have assumed something like this is very common if you’re selling with contents in place.

its extremely common but thats not enough for the financial puritans

Is this common practice when selling a house?

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